Old and new battle for Footsie

THE TERRORIST attacks on the US on 11 September have shaken everyone's view of the world and leading shares have not escaped the fallout. When the Footsie committee meets to conduct its quarterly review of the prestigious top 100 companies index on Wednesday, it is likely to make few changes and - for once - the spotlight will not be on shares in telecoms, media and technology (TMTs).

Big-name TMTs have been recovering since September, when eight - Marconi, Spirent, Energis, Telewest, Colt, CMG, Misys and Carlton Communications - were booted out. TMTs are now seen as relatively safe havens.

In fact, three of them look set to return to the Footsie over the next six months. They are on the threshold of the elite club, but lie well behind two old-economy types.

P&O Princess - which plans to get even bigger by merging with cruise rival Royal Caribbean - and logistics group Exel are the duo most likely to claim membership of the Footsie this month.

Old economy groups also head the list of companies at risk of relegation. Those in danger are headed by car and aircraft engineering group GKN, Enterprise Oil, hit by a weakening oil price, and distribution group Electrocomponents, with Innogy and British Airways not far behind.

But it will be touch and go over the next few days. GKN, Enterprise and Electrocomponents will have to fall below 110th ranking to be automatically excluded, while P&O Princess and Exel will have to rank among the top 90 to be automatically included.

A month ago, it looked as though the review would be more dramatic. British Airways shares crashed, along with other airline stocks, when the events of 11 September seriously dented the ambitions of globe-trotting travellers. The value of 'the world's favourite airline' plunged below £2bn and for a time it was eclipsed to the extent of £1bn by no-frills rival Ryanair.

But BA has recovered on hopes of a merger with American Airlines, while Ryanair cannot be considered for the top 100 because its primary quote is in Dublin.

Another company in danger of relegation from the Footsie for six months has already been demoted. United Business Media was axed on 19 November when BT was split with a separate quote for its Cellnet arm, now awkwardly renamed mmO2.

There may never be another TMT bloodbath like that seen in September. There would have to be large-scale promotions first because the index now contains less than a dozen such firms compared with more than 30 at their peak in the spring of 2000. TMTs have suffered in most of the Footsie's quarterly reviews over the past year. But they still rank high among the big industry groupings, along with banks, oil and drugs.

The massive expansion of Vodafone alone ensures it top billing, since it is worth around £120bn and has recently been jockeying with BP for top spot in the Footsie.

Despite some knocks of late, another four TMTs - BT, Cable & Wireless, Reuters and BSkyB - rank among the top 30.